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Tuesday, August 24, 2010

Kitzhaber's triangle: one girlfriend, two companies

The sudden hubbub about an Oregon Department of Justice investigation into a company associated with former Gov. John Kitzhaber's girlfriend has included some serious head-scratching about Kitzhaber's involvement with that firm. Even the ex-gov himself couldn't figure it out. As the O reported last night:

Kitzhaber confirmed he was once on the board of 3EStrategies. When asked if he is still on the board, he said, "I'm not sure if I am or not." A Kitzhaber campaign spokeswoman later said he is no longer on the board.

It's easy to see how there might be confusion, because in recent years there have been not one but two Oregon companies by the name 3E Strategies, and the Kitzmeister's friend of the female persuasion, Cylvia Hayes, has been involved with both of them.

According to the Oregon secretary of state, the first 3E Strategies was an Oregon nonprofit (public benefit) corporation formed in January 2002. Its original name was Earth Connections - Oregon. In July 2003, it changed its name to 3E Strategies, and it kept that name until February 2009, when it changed it again to what it is now -- Green Economy Institute, Inc.

The IRS forms that the nonprofit filed for 2007 and 2008 both show Kitzhaber as a director and Hayes as full-time executive director. The 2008 form wasn't filed with the IRS until Sept. 29, 2009, but the instructions state that people who were directors during 2008 are to be listed. Thus, Kitzhaber was a director of the nonprofit organization for at least some time in 2008. He is also still listed, to this day, as a director of the nonprofit on its website, here. Meanwhile, Hayes is still listed as the nonprofit corporation's registered agent for state corporate law purposes.

On the day the nonprofit changed its name in 2009, a new, for-profit limited liability company, named 3E Strategies LLC, was formed. The Oregon secretary of state summary page about the for-profit company is here. Hayes is listed as a member, but LLCs don't have "directors," per se, and Kitzhaber's name doesn't show up anywhere in the business registry for the for-profit company. The company's tax filings with the IRS are not public. And that's if there even are any IRS filings -- single-member LLCs are typically ignored for federal tax purposes.

It remains to be seen which of the two 3E Strategies entities the attorney general's office is investigating -- the nonprofit corporation, the for-profit LLC, or both. The focus of the inquiry seems to be several consulting contracts that one or more Hayes entities have landed with one or more state agencies, particularly the shadowy Department of Energy. According to the nonprofit's website, the nonprofit did consulting work as far back as 2004:

In 2004, 3EStrategies began providing consulting services on green building, clean energy, sustainable business operations, and economic development projects. The demand for those services grew steadily.

In 2008, believing that making the transition to a post-fossil fuel, low carbon economy, was no longer being hampered by lack awareness or concern, but rather by lack of actual examples of the green economy in action, 3EStrategies decided to become a limited liability company focused directly on policy development and consulting on concrete, successful green buildings, clean energy companies and low carbon footprint businesses.

This last paragraph doesn't appear to be true as a matter of corporate law. The nonprofit did not become a for-profit LLC -- it simply changed its name, and a new LLC with the same name sprang up the same day. But more importantly, there was apparently lots of consulting going on when Kitzhaber was indeed on the board of the only 3E Strategies that existed at the time. And so if the investigation results in any criminal charges being filed, it could be quite damaging for the once-and-(he-hopes)-future governor.

Cylvia Hayes is the founder and Executive Director for Earth Connections --
Oregon. With 14 years of professional experience in environmental education
and advocacy, she specializes in sustainable living and environmental ethics.http://www.electrifyingtimes.com/cylvia_hayes_prius.html

This is a non-story, I think. Also, the investigation by the state mainly concerns state activities, not this particular company (or what's actually a subcontractor). It's just one of many contracts they're checking out, according to other published stories.

And, Kitzhaber doesn't have anything to do with it, formally or informally. The only connection is--the company that subcontracted some work (which is common) is where his longtime girlfriend works.

I'm also confused by people who think that somehow Kitzhaber was dishonest or otherwise "weasely" as governor. Now *that* is a short memory, indeed.

How the heck does Kitz pull these babes? Outside of the favors he can serve up in exchange, I guess.

"This is a non-story"

Just like Neil's extra-curricular activities had nothing to do with how good a governor he was. Obviously, Kitz is calling in some favors for the girlfriend, whether or not its a good investment for taxpayers. Is this what we can look forward to?

This really sounds like a lot of bluster about nothing at this point. Supposedly unnamed sources say that the girlfriend is being investigated because there were "contracting irregularities" involving her company and one or more DOE employees. Without anything more specific than that, I concur in the assessment that this is a non-story until something a little more concrete is revealed to us.

It's going to be Gov. Kitz again next January. Wouldn't matter if his girlfriend was Diane Downs.

This state is sewn up tight. You can't win without competing in Multnomah County and Dudley has that R next to his name that produces a rabid, Pavlovian response from vast numbers of Portland-area voters.

If you can win big in Multnomah, Marion and Lane counties and carry or be close in Washington and Clackamas, you will be the governor. Period. The rest of the state doesn't matter.

Those five counties. That's where the huge majority of the clones live and they would vote for Stalin if he had a D next to his name.

And you don't think a partisan like Kate Brown would let an R just waltz into office on her watch, do you?

Kitz has absolutely nothing to worry about. If he wants to be governor, he will be.

I'm thinking more Greek tragedy. Kroger is Agamemnon to Kitzhaber's Hector, with Cylvia Hayes in the role of Helen of Troy. Or maybe Kroger's the deus ex machina dropping in to punish vain King Kitzhaber's hubris for trying to grab power a second time.

Based on the comments here, it's apparent that Kitzhaber is The Devil, Satan incarnate, and responsible for everything from budget deficits to the Oregon state flower.

If we elect him, it's clear that Hell will open up and disgorge a thousand demons to work on his staff. Whatever you do, don't vote for him--it could mean the end of the world as we know it. Instead, vote for...Dudley? I mean, surely *he*'s got the smarts and experience to deal with governing a state with several million diverse people in disparate geographic and political locales.

"and responsible for everything from budget deficits to the Oregon state flower."

Really, if you'd like to address an issue on the merits instead of launching into personal attacks on other comment, feel free to start anytime.

I believe this article was about getting govt money for his girlfriend who is on some mystery mission of questionable benefit to the taxpayers - If you disagree, fine.

I'm only holding him responsible for what he did the previous 8 years he was governor (you know his side reference to changing the way we do things in Oregon.)That wasn't much given that those were some of the fattest 8 years in the economy in Oregon ever.

I believe this article was about getting govt money for his girlfriend who is on some mystery mission of questionable benefit to the taxpayers - If you disagree, fine.

You'd better read it again. That's not what it's about.

I'm only holding him responsible for what he did the previous 8 years he was governor (you know his side reference to changing the way we do things in Oregon.)That wasn't much given that those were some of the fattest 8 years in the economy in Oregon ever.

What are you holding him responsible for, exactly? You're both vaguely complaining, then attempting to denigrate whatever it was he did by saying things were "good" during his tenure. You can't have it both ways, Steve; if he did a bad job but things were good, what does that say, exactly? Or is your main point to attempt to prove that Kitzhaber had nothing to do with the good, and only was responsible for the bad?

"if he did a bad job but things were good, what does that say, exactly?"

Very simple, Kitzhaber had nothing to do with the explosive growth of high tech. However, he benefitted from the tax revenues. He never set up or even asked for a rainy-day fund or some way to manage PERS or find some stable way to fund schools. Instead he just spent it all.

Not that his successor did any better, but we already know what Kitzahber is incapable of - Why re-elect him?

Wrong on both counts, and I'd invite you to look it up yourself. Kitzhaber not only proposed a rainy day fund in his first term in office, he submitted it to the legislature. The legislature's response? Lockin the kicker fund in the Constitution so it couldn't be used for a rainy day fund.

or some way to manage PERS or find some stable way to fund schools. Instead he just spent it all.

Funding schools was one of the main reasons he gave for proposing the rainy day fund. Also, laying "PERS reform" on the Governor is interesting, given that it's primarily the legislature that's going to effect change in PERS. The Governor has no authority to "reform" it, though he can try and influence it. You do realize that, don't you? Given that, can you name your state representatives, and have you talked to *them* about "PERS reform" more than once? Honestly?

Steve, the article is about an investigation into certain contracts provided through DOE to companies under the BETC program. It's an anonymous source that put 3E into the tale, and it really has absolutely nothing to do with Kitz.

It's during Kulongoski's tenure. How would Kitz have had anything to do with it?

A farm bill passed Congress with absurd subsidies, some of which undoubtedly ended up with Smith Frozen Foods. Former senator Gordon Smith must be a corrupted crook who magically funneled money to his family company without actually having any way to do so!

Kitz sat on the board of 3E and probably can use what influence he has from his previous term as governor. From first read, 3E seems to have pretty tenuous grip on doing anything that would merit funding.

"Lockin the kicker fund in the Constitution so it couldn't be used for a rainy day fund."

If you are telling me that when you get an average of 12% upside (take my word, its well beyond inflation * pop growth) every budget period, you can't find any money for a rainy-day fund unless you abolish the kicker, I'd say look harder.

"laying "PERS reform" on the Governor is interesting"

Heck, at least Teddy noticed something after 7.5 yrs of being governor that PERS was going to eat us up. What did Kitz ever try to do and what will we he do different if elected this time?

My sense with Kitz is we'll get 4 more years of kicking the can down the road instead of the change he alludes to.

you can't find any money for a rainy-day fund unless you abolish the kicker, I'd say look harder.

I'd say you fundamentally misunderstand both state budgeting and how the office of governor works. I'm also not clear what you mean by "all funds". If you're thinking that establishing a rainy day fund is as easy as moving money from account A to account B, I've got a bridge to sell you, cheap.

But let's just cut to the chase here: You don't want to vote for someone who's a Democrat, do you? Then simplify your life, and vote for Dudley (or whomever the Republican party puts forward). Then, watch the results, and judge for yourself.

"The real problem in state government finances is an excess of state government. PERS isn't the biggest line item in the budget. Look it up."

Fine, I am waiting for Kitz to say something on either. We get these feel-good commercials about how different John is without a lot of substance - Which means change will last about as long as that commercial.

I am not crazy about Dudley, but at least he is addressing things like zero-based budgeting.

If it makes you feel better, Dudley stinks less than Kitz. Besides shouldn't you be convincing me why Kitz is so much better?

TOJimbo wrote "This state is sewn up tight. You can't win without competing in Multnomah County and Dudley has that R next to his name that produces a rabid, Pavlovian response from vast numbers of Portland-area voters."

Right and your point is.....

Because honestly, as long as the Repugnicants continue to be the party of the Walter and Rosalie Huss ideology and twits like Karen Minnis, of course there will be an instant negative response. So why the hell doesn't the Repug leadership (assuming that they actually have leaders in their ranks) wise up and craft a platform that is moderate enough to win in Multnomah, Lane, and Marion counties. Or does it take a freaking rocket scientist (not a political scientist) to figure out that a lot of us would support fiscal conservatism without all this religious right b.s. piled high.

Road Work

Miles run year to date: 80
At this date last year: 89
Total run in 2014: 401
In 2013: 257
In 2012: 129
In 2011: 113
In 2010: 125
In 2009: 67
In 2008: 28
In 2007: 113
In 2006: 100
In 2005: 149
In 2004: 204
In 2003: 269